The Paper Store announced that it is looking to enter into a financial restructuring that will likely culminate in a sale of essentially all of the Company’s assets.

To accomplish the sale in an efficient manner, The Paper Store and its holding company filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the District of Massachusetts (the “Court”). Concurrently, the Company filed a motion to initiate a competitive bidding process under Section 363 of the Bankruptcy Code designed to achieve the highest or otherwise best offer, or offers, for the Company’s assets.

The Paper Store expects to continue operating its business as usual and has obtained an interim agreement from its lenders to use the cash generated by the business in order to provide liquidity to support ongoing operations while the Company attempts to identify a potential stalking horse bidder. The Company will work closely with its various stakeholders to help ensure that ongoing obligations are met and services are uninterrupted.

The Company also filed with the Court a series of customary motions seeking to continue operating its business as usual and uphold its commitments to its valued customers, employees, and other stakeholders during the process. These “first day” motions, filed to ensure a smooth transition into Chapter 11, include requests to continue paying wages and providing benefits to employees in the normal course and honoring customer programs.

After thoughtful consideration, The Paper Store determined that a sale is the best path to maximize the value of its leading specialty gift retail business, for the benefit of customers across the United States and its other stakeholders.

To accomplish the sale in an efficient manner, The Paper Store filed for Chapter 11. The sale will be run by an investment banking firm retained for that purpose and conducted through a Bankruptcy Court-supervised process designed to achieve the highest or otherwise best offer, or offers, for the Company’s assets. Subject to Bankruptcy Court approval, the prospective buyers will have the opportunity to bid on the assets of the Company.

The Company expects to continue operating its business in the ordinary course during the Chapter 11 proceedings.

The Company has filed with the Court a series of customary motions seeking to continue operating as usual and uphold its commitments to its valued customers, employees, and other stakeholders during the process. Approval of these “first day” motions, which the Company expects to receive in short order following a hearing, will help facilitate a smooth transition into Chapter 11.

The Paper Store has obtained an interim commitment from its lenders that, subject to Court approval, will permit the company to continue to use the cash generated by the business in order to support ongoing operations while the Company attempts to identify a potential stalking horse bidder.

The Company expects that current employees will be paid their wages/salaries and receive their benefits as usual, without interruption, during the process.

The Paper Store will remain focused on successfully serving its customers, providing them with unparalleled specialty gift products and services. To maintain customer satisfaction, loyalty, and goodwill, the Company has sought Court approval to maintain and honor its gift card/certificate programs in the ordinary course. The Company expects to receive approval of this motion in short order.

The Company filed a motion to initiate a competitive bidding process under Section 363 of the Bankruptcy Code designed to achieve the highest or otherwise best offer, or offers, for the Company’s assets. Among other things, the bidding procedures will establish a timeline for submission of bids, an auction (if required), and a hearing to approve the sale. The Paper Store has retained the services of an investment banking firm to run the sale process, which ultimately is subject to approval by the bankruptcy court.

For more information about The Paper Store’s Chapter 11 proceeding, including access to Court documents, please visit https://www.donlinrecano.com/tps.